Prudent Investment

The suggestion that the Lehigh County Pension Board make a modest investment in Northeast Pennsylvania Venture Fund has been in the news lately. Some comments are in order.

First of all, I thought The Morning Call's editorial on the matter was thoughtful and fair. While The Call comes to a conclusion on the matter different than many of us, it was neither mean-spirited nor unfair.

Unfortunately, the same cannot be said for public statements made by several others. County Controller Frank Concannon's deputy has seen fit to make public statements which are clearly unwarranted and misleading. He implies that an investment in NEPA Venture Fund would be speculative, imprudent and unlawful. The facts are otherwise.

In the first place, the Pennsylvania Legislature has specifically considered the matter of pension fund investments in venture funds and found them to be both prudent and lawful. House Bill 2114 authorizes state pension funds to invest specified portions of their assets in venture capital limited partnerships.

Nor are such investments in any way imprudent. On the contrary, the record of these investments is excellent.

According to the April 8 Forbes magazine, "a little over one-third of the money invested in private (venture) funds comes from pension funds." These investments equal $3.1 billion last year, up from $2.5 billion in 1983. Forbes goes on to say, "It may change, but nobody can remember any of the 500 venture funds losing money overall."

With these facts in mind, one may well ask: What is all the fuss and petitioning about? The answer, of course, is political posturing and hypocrisy of the first order. Controller Concannon, for example, has recently pushed through a resolution authorizing the purchase of a material amount of Israeli bonds. There is nothing wrong with Israeli bonds per se. The fact is, I own some myself. But one wonders how Concannon cay say with a straight face that those bonds are purchased for their "social value" while opposing a prudent county investment in a venture capital fund which is designed to create a significant number of jobs in his own county. Apparently Concannon finds no social value in that. Perhaps this is because Concannon is counting votes, not jobs.

NEPA Venture Fund enjoys generous support and confidence from the financial community and is grateful. We can get along fine without the posturing politicians.